Ontario in the Asian Century

Asia's tiger and dragon economies are big and fast. And Ontarian businesses should catch them, if they can, according to the recent "Asia Pacific Global Export Forum".

Asia's tiger and dragon economies are big and fast. And Ontarian businesses should catch them, if they can.

This was the agenda of the recent "Asia Pacific Global Export Forum", organized by Ontario's Ministry of Economic Development and Innovation.

The opportunities for Ontario of "Asia Rising" were first outlined by Yuen Pau Woo of the Asia Pacific Foundation of Canada.

Woo highlighted that Canada is still highly dependent on the US, which is accounts for 75% of its exports. By contrast, Asia's two giants of China and Japan together represent just 7%!

And the province of Ontario is lagging even further behind the curve than Canada as a whole, with an Asian trade share half the national average. The resource-rich Australia, with which Canada is often compared, sells two-thirds of its exports to Asia.

It is true that the gloss has gone off emerging Asia in recent times, with growth rates dropping, in particular for China, India and Indonesia.

India's reform process is at a critical testing point, with the strategy of service-based growth showing limitations. For China, the issues are will the economy face a hard landing or a happy landing, and what will be the new drivers of growth.

But the longer term trend is clear. Asia's emerging economies have taken off on a trajectory of catchup to the West. And despite its aging population and shrinking economy, Japan will remain one of the world's biggest and richest economies for years to come.

Over the medium term, Asia will continue to drive global economic growth through urbanization, the rise of middle class consumers, the expansion of the services sector, and innovation-driven growth.

And these Asian economies represent immense market opportunities for Canada, for a vast range of sectors -- like seafood, ice wine, dairy, health care, clean technology, information and communication technology and the automotive industry. One great Canadian success story has been IMAX, which is positioning itself as a premium consumer brand in countries like China and Korea.

The Asian Development Bank's Samuel Tumiwa highlighted four main sectors for Asian market growth -- urbanisation (planning and execution), clean energy and energy efficiency, sustainable transport in light of increasing automobile ownership, and water. Indeed, water is a much bigger issue in Asia than energy, with the water/food nexus being crucial.

Tumiwa emphasized that local players in countries like China, India and the Philippines are growing in strength. They have improved capabilities in areas like roads, water and electricity.

Western companies must now think more seriously about their value added, especially in terms of technology and expertise. There is indeed a growing demand for expertise. They must also examine critically how the fit into the whole supply chain.

Corporate lawyer Peter Murphy stressed the intellectual property risks of doing business in Asia. You must get your IP house in order by registering IP locally, holding your IP as close to your chest as possible, and above all identifying the right local partner. Other challenges include contract enforcement, changing laws, corruption, repatriating profits, logistics and infrastructure.

The conference closed with a number of country 'road-show' sessions, where speakers exhorted the assembled businessmen to wake up to Asia. Many presentations did however skate over some of the complexities and hidden traps of doing business in Asia.

In reality, while doing business in Asia offers immense opportunities, it is not for the faint-hearted. Building deep and trusted relationships is essential for dealing with Asia's endemic problems of massive corruption, chronic IP theft, and general weak governance. Above all, you need to choose partners carefully. But it is a very time-consuming process, especially for Western businessmen with their typical short-term focus.

Fundamentally, what is required is a fascination and curiosity for all things Asian -- especially in light of the diversity in Asia, both within and between countries. But Ontarian business remains very much North Atlantic in spirit, despite the provinces burgeoning Asian migrant population.

Australian lawyer, John Howard, also representing the Canada Australian Chamber of Commerce, presented some interesting perspectives. In this context, one possible fast-track for Ontarian business in Asia could be found through joining forces with some of Australia's successful businesses in the region -- all the more so, in light of the growing business connections between Australia and Canada.

More recently, a different and profound take has again been offered by Yuen Pau Woo in speaking of the power of cultural connections between Vancouver and Asia:

“Until we embed the city more deeply into the passions of Asia, of the region, we will not be able to achieve the kind of economic and political linkages that I think our leaders aspire to.”

In short, Ontario now has lots of food for thought when it comes to doing business in Asia.